European wheat prices rose on Thursday, buoyed by gains in US futures and potential weather damage to crops in the Black Sea region, a major competitor to EU wheat on the world market. December milling wheat, the most active contract on the Paris-based Euronext exchange, was up 2.25 euros, or 1.2 percent, at 185.50 euros a tonne at 1607 GMT.
That was still well below the 10-month high of 190.50 euros a tonne hit on Tuesday on weather concerns in major producing countries. "The market is consolidating with the help of Chicago and weather forecasts are under surveillance in the Black Sea. It is still dry but there is no consensus on actual losses," one Euronext trader said.
Lower crops are expected in both Russia and Ukraine. On the cash market activity was light due to a lack of sellers after a sharp downward correction on Wednesday. In Germany, cash market premiums in Hamburg firmed to compensate for the sharp overnight fall in Paris with a lack of farmer selling underpinning prices.
Standard bread wheat with 12 percent protein content for May delivery in Hamburg was offered for sale at 8 euros under Paris December against 18 euros under on Wednesday. "In north Germany there is increasing concern about lack of rain which could reduce crop yields this summer unless June is very rainy," one German trader said.
"There is a large reduction in farmer selling because of worry about the crop in north Germany." In Poland, export prices rose in the past week for both old and new crop wheat following high international markets and exchange rate movements.
"We have a very interesting situation because domestic prices paid by millers did not follow and so more wheat is flowing into export supplies," one Polish trader said. "Some expect that Poland's late season exports will be active again after a very slow year and more wheat stocks will leave the country than some had expected following low shipments in recent months."
Exporter purchase prices for Polish 12.5 percent protein wheat for May-June delivery rose by 10 zlotys a tonne to 725 zlotys a tonne (168 euros). Buyers were seeking 730 zlotys a tonne. Miller offerings were much lower at 675-705 zlotys a tonne depending on region for 12.5 percent protein for May/June delivery and feed makers 670-700 zlotys a tonne for immediate delivery.
Concern about dryness damage to wheat is also increasing in Poland. "On the east side of the Vistula river which divides Poland, the weather is excellent with high temperatures and showers with grains growing well," the trader said. "But west of the Vistula rain is urgently needed, otherwise we could see some dryness damage."
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